bakedbean

I think most folks know of this rule in Penang, which is supposed to stop property speculation by Foreigners. Foreigners must hold the property they have bought for 3 years upon signing of the S&P agreement. And of course we all know that it is the Foreigners fault that has driven up prices in Penang, and certainly not the locals who buy and flip properties at the drop of a hat.( Sarcasm On )So today I went to the Commissioner of Oaths in Georgetown and had a good barney with the good lady. You want to invest in a Penang property? she said. No I do not. I have had my property for 4+ years. Of course she wasn't getting the sarcasm of the situation. Mr bakedbean had passed away several weeks ago. Our property was in joint names. You just switch the Names, right?No. Well I knew what was coming. My friendly will adviser cheerfully informs that the clock gets re-set back to Zero. All taxes apply as if it were a new Sale. A sale from myself (and Mr bakedbean) to myself. And I am not allowed to sell the said property for another 3 years.Better hope that I get the new MM2H visa then.They just don't seem to join up the dots here, do they?Anyway, who cares, Fat Bird Marlborough Sauvignon Blanc is still on special offer in Cold Storage, so I went and treated myself afterwards, as you would

Gunnar45

Hi BB,
Since you were joint owners, wouldn't the taxes, etc at least be only half? I mean you already owned half of the place....
I wonder how it will be with a single owner to a condo writing a will to benefit the surviving spouse.
Would that condo be locked in for another three years as well?
As you describe it, it looks as it would.
Haven't thought of that possibility....

Anyway, I would ask for a second opinion here.....

bakedbean

Haha yes. And hold the property for one and a half years? No chance. I think they just treat it as a Name Change. It is a Change. It is a new Sale. That's it.I think the scarey thing is perhaps for a spouse who needs to reapply for the MM2H visa, and doesn't have enough to prove income. Then what? Spouse has to leave, but not allowed to sell the property? It's a bit stinky, isn't it. It hasn't been thought through.

InVinoVeritas

This seems grossly unfair. As it is only Penang which has this 3-year rule perhaps you (or your lawyer) could appeal that it be set aside in this case on compassionate grounds. Not sure how that would take place in Penang but there must be some recourse. What about getting the British High Commissioner involved?

Gunnar45

I have just searched the web and also MM2H sites for the subject matter.
Yet I have not found any indication of whether there is such a rule, I mean that a foreigner is not allowed to sell the property he bought within the first three years after purchase.
So my question is simply, is there really such a rule and if so, where can I find details about it?

InVinoVeritas

BB - I found an interesting reply on the HHQ website http://www.hhq.com.myr/ which seems to match your circumstances

September 3, 2015 at 10:35 am

Due to the Deceased’s wife is a Foreigner (an English), the transmission of her husband’s 1/2 undivided shares of estate to her shall still subject to the State Foreign Consent to be first obtained, however the same is exempted from the Minimum Foreign Purchase Price of the Property (i.e. Capping price of 1 million for Strata Property or 2 million for Landed Property in Island of Penang).

Kindly be informed that the application Fees for State Foreign Consent on Residential Property (to be Residential Title) in Penang is RM10,000.00 and upon approval, the Transferee is not allowed to transfer/dispose the said Property within 3 years in accordance to the rules and regulations of the State Authority in Penang.

The 3% Approval Fees on the Consideration Sum upon approval for the State Foreign Consent in Penang shall not be applicable to this matter as no Consideration Sum is involved on the transmission of the estate of the Deceased. Apart of that, the 2% Levy Fees on the Consideration Sum for selling of the estate’s Property within 3 years by the Beneficiary (if any) is also exempted by the State Authority in Penang with accordance to their directive.

In the event that the Foreigner would like to sell the Property within 3 years after received of the said estate from the Deceased, the Foreigner may try to apply to the State Authority with the appropriate reason and the State Authority may at their absolute discretion discharge the Foreigner in case by case basis.

Looks promising. It also answers your question Gunnar.

Gunnar45

Thank you IVV.

JC3

Well done IVV. But link above is not quite right. Try this one and scroll down to the Q&A. Minimum Property Purchase Price For Foreign Interests Acquisition in KL, Penang and Johor | Halim Hong & Quek I note the name of English lady asking the question is Jean Herbert. BB perhaps you can find contact details for her and share knowledge and experience on this issue. JC3

InVinoVeritas

Ah thanks JC - the posting editor on BE is playing up a little at the moment.

If anyone knows a Jean Herbert please SHOUT now.

JC3

Yes there is such a rule. Sale of properties by all foreigners in Penang is only allowed 3 years after signing of Sales and Purchase agreement (SPA). Any stamping of SPA made after 1 July 2012 is subjected to these changes. For further information refer to the Departmentof Land and Mines Penang. JC3

bakedbean

So, if I went to them and said I'd just about had it with Penang thank you very much, they might waver.
No it didn't come as any surprise really. Anyway, I am not going anywhere for the moment.

JC3

Hi BB, I find this re-application of the 3 year restriction on selling your property (i.e. the reset to zero) incomprehensible. It must simply be unforeseen and unintended consequences of the ‘new’ law. Given that you have already owned your property for more than 3 years, the intent and purpose of the restriction (to stop property speculation by foreigners) has clearly already been achieved. You should not be restricted from selling for 6 years (actually 7 years or more in your case), that’s just wrong. In your shoes, I would like the flexibility to sell upwhenever I want (or at least after Year 5 when RPGT falls from 30% to 5%). If you became ill within the next three years and needed to return to the UK or elsewhere, you might want to put your property on the market. I think it’s better to get this sorted out now if you can. It’s bound to take a few months anyway. I would suggest that you do apply now to the State Authority to request that the second 3 year restriction be waived as it is grossly unfair. But get a lawyer to draft your letter / assist with your submission. I can recommend a good Penang property lawyer to you if you need one. If you don’t succeed with the State Authority, then ask the MM2H Director and the Minister of Tourism for their assistance to sort it out. I also like IVV's idea of getting the BHC involved. They should be working on solving this issue (separately) for the benefit of all MM2H'ers buying property in Penang. JC3

InVinoVeritas

There is a bug on BE at the moment. You need to go into your profile and select the standard editor with extra formatting (not WYSIWYG). I'll sort your post out for you.

Chris1855

Baked Bean

Sorry to hear of your husband's passing. I think what has been discussed here is valuable information for all of us who own property in Malaysia. I hold property in joint names with my wife, my property lawyer did suggest we set up a will to arrange the transfer of the property due to Malaysian probate not working like most jurisdictions (no automatic transfer to the surviving owner), i neglected to do this due to being younger but after reading this its worth pursuing to avoid of these pitfalls

I think there is a lot that has not really been thought through properly by the law makers. I heard of one poor guy on MM2H that had his probate go through Sharia law even though he was not muslim, just because he had a muslim sounding name, apparently it took ages for his wife (not muslim) to access bank accounts, she was stuck in limbo for a long period of time

Chris

bakedbean

Hi Chris, thanks, and welcome to the forum. Think we know you from another place maybe